Accident-PRONE young drivers and a surge in fraudulent claims are key factors behind the steep rise in motor insurance premiums which threaten to drive some motorists off the road.

According to the benchmark AA British Insurance Premium Index, motorists faced a startling increase of 11.5 per cent in the third quarter, based on the cheapest three quotes collected in its survey.

In the year to September 30, the cost of annual comprehensive cover jumped by 39.3 per cent to £792, the biggest annual rise ever recorded by the Index, which began in 1994.

For third party, fire and theft policies, which is the best that many younger, riskier drivers can get, a 54.6 per cent jump produced an average annual bill of £1,097.

Young drivers face the stiffest rises because they generate so many claims.

Over the past year, the average cost of cover has jumped by 51 per cent for 17- to 22-year-olds.

Even after shopping around, men of this age can expect annual premiums around £2,500, while women (less dangerous) pay £1,400.

Aa Insurance director Simon Douglas says: "Statistics from the Department for Transport (2009) show that a third of men killed or seriously injured on Britain's roads are under 25."

He adds: "Car crashes are by far the biggest threat to life among young people - considerably more than drugs or knife crime, for instance."

The pain for all motorists, says Douglas, has been intensified by price comparison sites which drove premiums so low that many companies lost money on car insurance.

"Five years ago we warned that sharp premium inflation would be the result of this competition but the recession is adding to the pain," he says.

Today, insurers pay out £123 to settle claims for every £100 collected in premiums and the Government will push prices higher on January 1 by adding one per cent to insurance premium tax.

The AA thinks premium rises could continue in 2011, although the largest rises may already be factored in.

Meanwhile, few can predict when the bill for settling personal injury claims will level off as "no-win, no-fee" lawyers seek out accident victims to pursue their claims.

One estimate suggests 30,000 fraudulent claims are paid out each year, adding an average £80 to the cost of each policy purchased.

Drivers now find themselves under growing pressures. How can they keep car insurance costs under control? Online price comparison sites are a vital weapon. The AA figures show that comprehensive cover purchased from the cheapest three comparison site quotes averaged £592.08, saving £200, while third party, fire and theft policies on the same basis cost £764.77, saving £333 against average price.

Drivers can also save money by raising the excess (the limit of the bill they will pay themselves) on their policy, particularly when the valuation is relatively slow.

You may not actually be sacrificing much if you agree to pay an extra couple of hundred pounds in the event of a claim, in return for a lower premium and a better chance of preserving your no-claims bonus.

So, what can be done to help young drivers? The AA's Simon Douglas says insurers, road safety organisations and the Government must lead the drive for higher quality driving standards.

"This can partly be achieved through education, such as Drive Smart courses in safe and fuel-efficient driving offered by the AA Driving School," he says. "Courses are available free to at-risk new drivers through the AA Charitable Trust."

Young drivers can also get cut-price insurance from makers on new models.